Thursday, 24 December 2009

Pay a tax if you tan

The US healthcare bill that is doing the final rounds in the Senate today is a landmark piece of legislation, if passed. It has aroused intense emotions and divided America. But an obscure part of the bill, buried in the thousands of pages of legalese is illustrative of the way lobby and pressure groups have come to influence economic policy.

In the first draft of the bill, a tax was proposed on cosmetic procedures like Botox injections, breast implants, tummy tucks, etc. Part of the ingenuous ways of raising revenue to fund the massive healthcare costs. Inevitably, this tax proposal has come to be called as Bo-tax. Now the medical industry lobbied like crazy to get Bo-tax reversed. And they succeeded , at least in the latest draft doing the rounds. No comment on what persuasive powers they used.

However the government cannot forego any revenue at all, considering the huge costs the health care bill is likely to result in. They have therefore replaced the Bo-tax by a tax on tanning salons that use sunbeds.

Predictably there’s howls of outrage from the tanning industry lobby. They have caught on a great angle to protest on. Tanning salons are obviously used by only white people. Therefore they are claiming this tax is racist ! And since most of the clientele is women, they are calling it sexist as well !!

A spokesman for Harry Reid , the Senate Majority leader is reputed to have stated that the swap of Bo-tax with the Tan tax was “based on the more compelling health concerns with indoor tanning services”. The tanning industry association has shot back that ultraviolet light has at least some proven health benefits, while Botox has none.

So the lobbying goes on. If this is what is happening on an obscure side show, you can imagine the lobbying that is going on, on the main aspects of the bill. And for that matter every piece of legislation. No wonder Washington is full of lobbysists and pressure groups with a single agenda item – everybody is clamouring for his or her own cause and to hell with the rest of the world and the consequences.

Is this any way to determine economic policy ?

10 comments:

Srivats said...

haha Botox BO TAX , I have new found respect for our country now, US is no different than us, and hence there shouldnot be bashing to Indian gov policies.

Srivats said...

I am first! to comment on ur blog after so long!

VA said...

I second Srivats's thoughts that US is no different than us... perhaps we do not get into nuances of such policies outside India... likewise such kind of policies won't matter much for an American if being considered outside the states...

Quite an informative post. Kudos to you for bringing this on the blog!

Ramesh said...

@sri - Oh governments world over are the same to varying degrees. In the US they do such things wearing a suit and in India they do the same things wearing a dhothi !!

@VA - Unfotunately in all democracies, such lobbying and pressures work. But the difference is that in India we have crossed many lines others wouldn't. For eg, Shibu Soren would not get elected again in any other country after being convicted and jailed.

Sandhya Sriram said...

The only phenomena left out to be taxed is birth. If at all there was one, ,maybe india wouldn't be the world's most populous democracy.

Ramesh said...

@sandhya - Ha Ha; now that's an interesting idea !!

Prashanth said...

I remember when Obama got elected, he promised that there would be no more lobbyists. And yet we see them influencing major policy decisions such as the health care reform. Maybe we need a lobby to remove the lobbyists.

Ramesh said...

@Prashanth - Yes he said that, but there's no way he, or for that matter any other President, is going to be able to achieve that. Lobbying is an inherent evil of democracy. If we choose that political system, we have to live with this. But a lobby to get rid of lobbyists is a great idea !

gils said...

namma oor karangana.."tan tax" nu per vachirupanga :D who knows the baniyan brand mite sell like anything after this gets passed as bill.. :D

Ramesh said...

@gils - ha ha - you are in fine form.

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